Which? has found that BT may be breaking the law by not providing sufficient cancellation rights when existing customers sign up to renewable contracts over the phone.

According to a sales telephone script BT sent Which? in early February 2010, BT gives existing customers who take out a renewable contract by phone no right to cancel without penalty once they hang up.

You can find out more about home phone contract cancellation penalties and your rights to cancel your phone contract in the Which? guide to phone contracts.

What are renewable contracts?

With a renewable contract, once your initial tie-in ends it is automatically renewed for the same period (such as 12 months) unless you actively cancel in advance. Otherwise you’re locked in again for another year or more.

BT is not the only home phone provider to offer renewable contracts – smaller providers such as eZe-Talk also offer them - but BT is the only leading provider to do so.

BT’s most popular renewable contract gives you free evening calls – otherwise £2.99 a month on a monthly subscription – in exchange for signing up to a 12-month renewable contract. If you cancel part way through your renewable tie-in you’ll be charged £7.50 for each remaining month of your contract.

Find out how BT measures up to other home phone providers such as TalkTalk and Virgin Media in the Which? review of home phone services.

No right to cancel

BT does not give written details of cancellation rights to existing customers signing up to a new renewable deal by phone until, according to BT terms and conditions, it’s too late for them to cancel without charge. Which? believes this puts BT in breach of UK distance selling regulations.

BT told Which? that it has no intention of disadvantaging customers who have genuinely misunderstood what they have been told or those that change their mind by the time they receive a confirmation letter. BT says that in this situation, it allows customers to end their contract without an early termination fee within the first few days if they call to request this within the first few days.

It told Which? that it’s considering formally adding this right to its contract terms and confirmation letters where appropriate.

Peter Vicary-Smith, chief executive, Which?, says: ‘We think BT is pulling a fast one by not ensuring some customers have a cooling off period.

‘We are encouraging it to formally add appropriate cancellation rights to its contracts as soon as possible.’